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Two separate reports show companies doubling down on collaboration and cloud IT investing PHOTO: Veronika Balasyuk

2016 was a good year for enterprise collaboration and cloud IT infrastructure vendors according to reports from two research firms released this week.

Synergy Research Group released data for the fourth quarter of 2016 that found Cisco grew its collaboration market share for the third consecutive quarter. It passed the 15 percent mark in the final three months of the year, taking the lead among a field which included Microsoft, Avaya and IBM. 

The International Data Corporation (IDC) also produced its own industry spending report this week.

The Framingham, Mass.-based research firm reported in its Worldwide Quarterly Cloud IT Infrastructure Tracker vendor revenue from sales of infrastructure products (server, storage and Ethernet switch) for public and private cloud IT grew by 9.2 percent year over year to $32.6 billion in 2016.

Cisco Gains in Collaboration

Synergy's research showed positive growth in collaboration solutions in general and for Cisco in particular. 

Cisco led the field with its closest competitor Microsoft landing 2.5 percentage points behind. 

Avaya and IBM have competed for third place in the market. IBM beat Avaya in the fourth quarter. Avaya led for the full-year of 2016. 

According to Synergy researchers, Cisco’s market share growth in the latest quarter was boosted by a five-year market share high in premises-based solutions. It also did well in hosted/cloud market segments. 

Microsoft has a "strong lead" in hosted/cloud collaboration. 

Reno, Nev.-based Synergy found other major players in the market include AT&T, Verizon, Citrix, Polycom, Mitel, UNIFY and ALE. 

Synergy researchers also reported that total revenues from collaboration — it includes enterprise voice, UC applications, telepresence, email software, enterprise content management, enterprise social networks and hosted/cloud communications and applications — topped the $9 billion mark and was close to its all-time high. 

The cloud-hosting market saw a yearly uptick in revenue of 9 percent. Premises-based systems was down 4 percent.

Teamwork, contact center as a service (CCaaS), and video as a service (VaaS) applications rose. Synergy researchers cited teamwork applications as "an emerging and super-high growth area." Cisco Spark and Slack are in that category.

“Collaboration continues to be a somewhat fragmented market that is characterized by a long list of disruptive and high-growth companies, with no less than 15 companies achieving full-year growth rates in excess of 20 percent,” Jeremy Duke, Synergy Research Group’s founder and chief analyst, said in a statement. “Looking ahead we see that new cloud-based applications will continue to disrupt traditional business communication systems, creating strong opportunity for new cloud-based solutions.”

IDC: Cloud IT Spend Grows 9.2 Percent

The IDC report showed cloud IT spending hitting the same heights as collaboration, with vendor revenue for the fourth quarter of 2016 grew at 7.3 percent to $9.2 billion.  

Cloud IT infrastructure grew in the fourth quarter while traditional, non-cloud revenues fell: Private cloud grew by 10.2 percent to $3.8 billion, public cloud by 5.3 percent to $5.4 billion and traditional (non-cloud) decreased 9 percent year over year in the fourth quarter. 

Ethernet switches grew at 52.7 percent year-over-year, followed by server at 9.3 percent and storage at 3.6 percent. 

Kuba Stolarski, research director for computing platforms at IDC, said hyperscale cloud datacenter growth "continued its pause."

"Network upgrades," Stolarski said, "continue to be the focus of public cloud deployments, as network bandwidth has become by far the largest bottleneck in cloud data centers."